Chinese Bonds: New Market Access Offers Fresh Risks

Beijing may have opened its bond market, but it has a long way to go to feel the world’s warm embrace

In a yield-starved world, China’s freshly cracked bond market seems like an enticing opportunity. But investors would do well to tread fearfully.

China announced Wednesday a lifting of restrictions on foreign involvement in its massive domestic bond market, making it easier for institutional investors to buy Chinese bonds. The changes include eliminating an $80 billion overall quota on foreign investment through one prominent...